Indian Prime Minister has offered Vietnam a credit line of $500 million dollars for facilitating deeper defense cooperation.
The deal, being one among a 12 cooperation agreements, was signed between the country’s Prime Minister Narendra Modi in Hanoi and his Vietnamese counterpart Nguyen Xuan Phuc.
The agreements were signed on Saturday in areas like health, cyber security, ship-building, U.N. peace-keeping operations and naval information sharing.
The credit was for facilitating mutual defence cooperation and relationship that would contribute to stability, securities and prosperity in the region, Modi was quoted as saying by Reuters Saturday.
The offer follows a rise of almost 700 percent in Vietnam's defence procurements as of 2015, the Stockholm International Peace Research Institute think-tank that tracks the arm trade over five-year periods stated.
Apart from setting a bilateral trade target of $15 billion by 2020, the Prime Minister Narendra Modi has also sought facilitation of ongoing Indian projects and investments in Vietnam. India has also granted $5 million to set up a software park in the country. The Ministry of External Affairs spokesperson, Vikas Swarup, said.
India and Vietnam share borders and large trade volumes with China. Both the countries have engaged in conflict with China over the territorial disputes in the Himalayas and the South China Sea, respectively. Both are strengthening their defenses.
India is heavily promoting its supersonic BrahMos missile and looking to sell the missile to Vietnam and four other nations.
Vietnam is in the midst of a military buildup to secure its 200 nautical mile Exclusive Economic Zone as China is becoming more assertive in staking its claims in the South China Sea, the analysts stated.
Vietnam is in the market for fighter jets and more advanced missile systems, besides six kilo-class submarines that it purchased from Russia, the last of which it will receive late this year.